Health insurance premiums can be reduced if you don’t make a claim, policy cancellations to be less costly and more: 5 rule changes
Insurance Regulatory and Development Authority of India (IRDAI) recently released a master circular to make health insurance policies more inclusive, flexible and customer-friendly. From reducing cancellation charges in indemnity-based health insurance policies to specifying how to offer a no-claim bonus to making claim-settlement procedures more transparent — the regulator has introduced some key changes in guidelines to make health insurance policyholders more empowered. ET Wealth Online explains what these mean for health insurance customers and how these rule changes in the health insurance policies will help policyholders.
Higher refund on cancelling health insurance policies
Policyholders can now discontinue a health insurance policy whenever they want and get a refund of the premium on a pro-rata basis if they have made any claims. All they have to do is to give their insurer a notice of seven days in writing.
Earlier, the refund on the premium was not on a pro-rata basis. Abhishek Kumar, a SEBI-registered investment advisor and Founder of SahajMoney.com, says, «Previously, if one cancelled the policy within one month, three months or six months after completion of the free-look period, then the refund of the premium amount will be 75%, 50% and 25% respectively.»
If you cancel a health insurance policy six months after the free-look period, you typically don't get any refund from the insurer, says Pankaj Nawani, CEO of CarePal Secure. A standard administrative fee is usually deducted from the refund
